Guthrie v. National Homes Corporation

• Decision Date: 28 July 1965
• Docket Number: No. A-10722,A-10722
• Citation: 394 S.W.2d 494
• Parties: N. E. GUTHRIE, Jr., Petitioner, v. NATIONAL HOMES CORPORATION, Respondent.
• Court: Texas Supreme Court

Page 494

394 S.W.2d 494

N. E. GUTHRIE, Jr., Petitioner, v. NATIONAL HOMES CORPORATION, Respondent.

No. A-10722.

Supreme Court of Texas.

July 28, 1965.

Dissenting Opinion Oct. 6, 1965.

Short & Smith, Wichita Falls, for petitioner.

Fillmore, Schaeffer & Fillmore, Wichita Falls, for respondent.

POPE, Justice.

National Homes Corporation sued N. E. Guthrie, Jr. and John D. Crow and Recovered judgment upon a jury verdict against both for $780.00, owing upon what it alleged was a negotiable promissory note. The Court of Civil Appeals affirmed. 387 S.W.2d 158. Guthrie alone has appealed and he has done so without bringing forward a statement of facts. He urges that he is not liable on a negotiable instrument on which his name nowhere appears, and also that the note contains a variance between the figures and the unambiguous written words that state the amount payable, in which case the courts below should have given controlling effect to the written words. It is our opinion that the instrument sued upon was not a negotiable instrument, and Guthrie is bound by the jury finding that he ratified it. We sustain Guthrie's contention that the unambiguous written words control the figures.

The instrument sued upon is as follows:

'$5780.00

Electra

Texas

3/8

1962

'Ninety (90) Days after date for Value Received I Promise To Pay to the Order of NATIONAL HOMES CORPORATION Five Thousand Eighty and 00/100 Dollars at Earl Avenue at Wallace, Lafayette, Indiana

It is hereby understood that $1000. overpayments will be made on future house deliveries until this obligation is paid.

With Interest at 6.5% per annum after date. All parties to this note, including endorsers and guarantors thereof, hereby waive presentment and demand for payment, protest, and notice of dishonor.

No. _____

Due _____

/s/ John D. Crow Crow Construction Co.'

The instrument is non-negotiable. These words were written in longhand on the face of the note, 'It is hereby understood that $1000. (sic) overpayments will be made on future house deliveries until this obligation is paid.' Goldman v. Blum and Heidenheimer Bros., 58 Tex. 630 (1883) says: '* * * though the agreement or written instrument may have to some extent the form of a promissory note, and may use in its body the conventional terms that ordinarily invest such instruments with the character of negotiability, but if, by a stipulation in the body of the instrument, these elements which give it negotiability are limited and qualified, the negotiability of the instrument is destroyed * * *.' See also, Martin v. Shummatte & Matthews, 62 Tex. 188 (1884). The additional terms written into the note burden it with the conditions of an extrinsic agreement and render it non-negotiable. Lane Co. v. Crum, Tex.Com.App., 291 S.W. 1084 (1927); Texas Land & Cattle Co. v. Carroll & Iler, 63 Tex. 48 (1885).

Parol evidence was properly admitted to prove that Guthrie ratified Crow's execution of the note. Texas Land & Cattle Co. v. Carroll & Iler, supra; Grimes v. Hagood, 27 Tex. 693 (1864). National Homes Corporation, the payee, obtained a jury finding that Guthrie ratified the note and ratification is ordinarily a jury issue. Binford v. Snyder, 144 Tex. 134, 189 S.W.2d 471 (1945). In the absence of a statement of facts, we must presume that the evidence supports the finding. Lane v. Fair Stores, 150 Tex. 566, 243 S.W.2d 683 (1951). National Homes Corporation, therefore, proved that Guthrie was liable upon the non-negotiable note.

The trial court admitted parol evidence concerning the agreement between National Homes Corporation and Crow with respect to the amount payable. The jury found that the principal amount they agreed upon was $5780 as evidenced by the figures instead of $5080 as evidenced by the written words in the note. The jury also found that there was an unpaid balance of $780. In other words $5000 had been paid on the note. Guthrie contends, however, that the written words 'Five Thousand Eighty and 00/100 * * * Dollars' are unambiguous and that they prevail over the figures as a matter of law. That is the rule applicable to negotiable instruments. Section 17(4), Article 5932, Vernon's Ann.Tex.Civ.St.; 11 Am.Jur.2d, Bills and Notes, § 158. it is our opnion that the reasons for the rule are sound and that the same rule applies and should apply to non-negotiable instruments. State v. Collier, 160 Tenn. 403, 23 S.W.2d 897, 901 (1930); Duvall v. Clark, 158 S.W.2d 565 (Tex.Civ.App.1941, writ ref. w. o. m.); Wallace v. Cook, 190 Ky. 262, 227 S.W. 279, 281 (1921); Romine v. Haag, 178 S.W. 147 (Mo.1915); 17A C.J.S. Contracts § 311. When there is a variance between unambiguous written words and figures the written words control, and the trial court erred in giving judgment based upon the figures. The amount payable was therefore 'Five Thousand Eighty and 00/100 * * * Dollars' and according to the jury $5,000 has been paid. National Homes Corporation should have judgment for only eighty dollars.

The judgments of the trial court and the Court of Civil Appeals are accordingly reformed so that National Homes Corporation shall have judgment for the sum of eighty dollars. Costs are adjudged against the National Homes Corporation.

GRIFFIN, Justice (dissenting).

I disagree with the majority opinion in the following particulars:

The majority has held the instrument in question to be nonnegotiable. I believe that this determination was unnecessary for the proper disposition of the case because the rights of the parties involved do not hinge on negotiability of the instrument.

The cause of action hinges on whether or not Guthrie ratified Crow's action in making this instrument and thereby became bound as the Maker thereof. In the absence of a statement of facts it must be presumed that sufficient evidence was introduced to support the jury's finding that Guthrie did so ratify Crow's action in making the note. Schweizer v. Adcock, 145 Tex. 64, 194 S.W.2d 549 (1946); Lane v. Fair Stores, Inc., 150 Tex. 566, 243 S.W.2d 683 (1951); City of Galveston v. Hill, 151 Tex. 139, 246 S.W.2d 860 (1952). As between Guthrie and National Homes Corporation, the established law of agency is that as soon as Guthrie ratified the making of the note by Crow he became subject to all the obligations that pertain to the transaction in the same manner and to the same extent that he would be, had the act been done originally by him in person. Mechem, Law of Agency, 'Ratification,' § 178; Restatement of the Law of Agency, Vol. 1, § 100; Gallup v. Liberty County, 57 Tex.Civ.App. 175, 122 S.W. 291 (1909) err. ref.; Hoffer v. Eastland Nat'l Bank, 169 S.W.2d 275 (Tex.Civ.App.1943) and copious authorities cited therein; Howth v. J. I. Case Threshing Machine Company, 280 S.W. 238 (Tex.Civ.App.1926) writ ref. in 116 Tex. 434, 293 S.W. 800. Inasmuch as no other defense was found in Guthrie's favor, the jury's finding that Guthrie ratified the making of the note not only conclusively established his liability on the note but also puts the parties to this case in proper focus as Maker and Payee. In a suit between the Maker of a note and the original Payee, it is established law in Texas that the original Payee is not a 'holder in due course' and therefore is subject to every defense to which he would be subject if the note were nonnegotiable. Williams v. Jones, 122 Tex. 61, 52 S.W.2d 256 (Comm. Appeals, Sec. B, 1932) opinion adopted; Stetson v. First Nat'l. Bank, 44 S.W.2d 792 (Tex.Civ.App.1932) err. ref.; Article 5935, Sec. 58, Vernon's Ann.Civ.St. Since the Payee, National Homes Corporation, is subject to every defense available against a holder of a nonnegotiable instrument (which is no more than a simple contract), the majority's determination of the negotiability of the instrument is, in my opinion, unnecessary to the case because the rights of the parties are determined by contract law and not negotiable instrument law.

The only question left to be decided is the amount for which Guthrie is liable. The jury found that the note should be in the principal amount of $5,780.00; that such note had not been paid in full; and that $780.00 principal amount plus $168.31 interest remains unpaid on the note. In the absence of a statement of facts we cannot say that the judgment against Crow and Guthrie for the $780.00 plus the $168.31 was not authorized.

In Lane v. Fair Stores, Inc., 150 Tex. 566, 243 S.W.2d 683, 685 (1951), this Court

said: 'In the absence of a statement of facts it must be presumed that sufficient evidence was introduced to support the findings of the jury and the judgment of the court. Schweizer v. Adcock, 145 Tex. 64, 194 S.W.2d 549 (1946).'

In City of Galveston v. Hill, 151 Tex. 139, 246 S.W.2d 860, 863(1), this Court said: 'There being no statement of facts in the record we must presume that there was evidence to support the verdict of the jury and judgment of the court.' (Citing authorities.)

The majority, however, has withdrawn this question from the jury's consideration and has held that as a matter of law the written words 'Five Thousand Eighty and 00/100' are controlling. I cannot find an adequate basis for holding as a matter of law that typewritten words control over typewritten figures in a simple contract; the majority opinion doesn't afford an answer but merely says that the 'reasons for the rule are sound,' citing the rule applicable to negotiable instruments. The obvious basis for applying this rule to...